USDCAD consolidates as traders await Fed and BoC guidance

The USDCAD pair is caught in a flat shuffle with a slight bullish bias, showing a temporary halt to the selling spree that followed its late-November plunge. This period of stability reflects traders waiting for the Federal Reserve (Fed) and the Bank of Canada (BoC) to show their cards.

Technicals are quite mixed but lean towards cautious hope. The Stochastic Oscillator is stuck in the doldrums of the neutral-to-bearish zone (with %K at 17 and %D at 25), while the Commodity Channel Index (CCI) is scraping the bottom. This signals bearish momentum has run out of gas. Such a position is the perfect setup for a technical bounce. On top of that, the Chaikin Oscillator, though still in the red, is slowly climbing out of the ground—a subtle sign that buyers are stepping back in despite the consolidation phase.

Price dynamics, in turn, follow suit. After finding its key 1.37980 support, the pair hit the pause button. Each attempt to push lower is met with resistance, though bulls didn't find enough courage to make a real run for it. With oscillators hovering near oversold territory, the ultimate scene has all the ingredients for a new comeback.

Fundamentally, the next chapter will be written by global central banks in the short run. The American regulator is widely expected to deliver another rate cut, yet it will likely adopt a hawkish stance regarding stubborn inflation and stable employment data to signal the current easing cycle is hitting the brakes—a potential tailwind for the greenback. In contrast, its Canadian counterpart is anticipated to maintain the status quo and keep borrowing costs on hold, bolstered by a rock-solid jobs report. This will put a floor under the loonie and a ceiling on the pair's rally.

In the longer term, however, CAD isn't out of the woods. Persistent trade uncertainty and the looming threat of US tariffs will ensure that volatility is here to stay.

Consider the trading plan outlined below:

Buy USDCAD on a rebound from the consolidation zone. Take profit 1: 1.39370. Take profit 2: 1.39920. Stop loss: 1.37800.

This forecast is relevant between December 10 and December 17, 2025.